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Affirmation of the Philippines’ “A-“ credit rating from the Japan Credit Rating Agency Ltd. (JCR) reflects the nation’s solid economic stability and strong credit standing, the Department of Finance (DOF) said.
In a statement, Finance (DOF) Secretary Ralph G. Recto said the rating is an endorsement of the Marcos Jr. administration’s development agenda and is expected to attract more investments.
Recto said the positive rating is expected to lower borrowing costs for both the government and businesses, attract foreign direct investment, and ultimately create more jobs for Filipinos.
“More Filipinos will benefit from the continued trust given to us by credit rating agencies,” Recto said. “Because of this, more investments will come in, more quality jobs will be created, and more Filipinos will be lifted out of poverty.”
He added that this ”back-to-back good news” shows that global institutions recognize the Philippines' strong economic fundamentals and sound reforms.
JCR noted that the Philippines has sustained an annual economic growth of around six percent in recent years, supported by strong domestic demand, low external debt, and robust foreign exchange reserves.
The agency expects continued growth under the Build Better More infrastructure program, with the newly enacted Public-Private Partnership (PPP) Code expected to boost private sector participation.
The report also highlighted key reforms that have improved the investment climate and strengthened competitiveness, including the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, which streamlined tax incentives, and the Capital Markets Efficiency Promotion Act (CMEPA), which modernized taxation and reduced transaction costs.
On the fiscal front, JCR confirmed the country's debt and deficit levels remain manageable. The national government’s debt-to-GDP ratio was 60.7 percent at the end of 2024, which the agency described as low compared to other ”A” rated sovereigns. It also cited the government’s Medium-Term Fiscal Framework for keeping fiscal consolidation on track through disciplined spending and revenue-enhancing measures.
JCR also noted that inflation has eased significantly and the poverty rate has declined faster than anticipated, supported by agricultural modernization and rising wages.
The affirmation comes at a favorable time, as the Philippines was recently placed on J.P. Morgan’s Index Watch-Positive, which indicates a possible inclusion in the bank’s global bond index. This would increase exposure of Philippine government securities to foreign investors, further lowering borrowing costs and boosting market confidence.
“The fiscal consolidation efforts promoted by the Marcos Jr. administration under its Medium-Term Fiscal Framework has been successful, and JCR expects the country’s fiscal soundness to be sustained,” JCR added.
Despite global uncertainties, JCR maintained that the Philippines is well-positioned to retain strong growth in the medium term, driven by government-led infrastructure projects, private consumption, and fixed capital formation.
